U.S. mortgage rates stayed at or near record lows in the past week, with the 30-year fixed rate 1/2 percentage point lower than a year ago, home funding company Freddie Mac said on Thursday.
In the midst of volatile bond markets, home loan rates continued to keep affordability high.
Demand for loans to buy homes tumbled to 13-year lows in May after spiking in prior weeks, when buyers raced to sign contracts before a homebuyer tax credit expired on April 30. The buyer retreat is seen as temporary, with spring sales pulled into earlier months because of the credit.
Low borrowing costs and home prices are seen putting the U.S. housing market on a gradual recovery path in the second half of the year.
Fixed 30-year mortgage rates averaged 4.79 percent in the week ended June 3, up just 0.01 percentage point from the prior week, and 1/2 point lower than 5.29 percent a year ago.
The rate hovers just above the low of 4.71 percent set last December. Freddie Mac started tracking 30-year rate weekly in 1971.
The 15-year home loan rate set a new record low of 4.20 percent, down just 0.01 percentage point in the week and well below 4.79 percent a year ago. The record dates back to August 1991.
The economy grew at a slower rate than originally reported in the first three months of the year, according to the Bureau of Economic Analysis, which suggests inflation will remain tame in the near term, Frank Nothaft, Freddie Mac's chief economist, said in a statement. As a result, mortgage rates held at historic levels this week.
(Reporting by Lynn Adler; editing by Jeffrey Benkoe)